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Reference.org
Yield to maturity
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<p>The yield to maturity (YTM), book yield or redemption yield of a <a href="/facts/Security_(finance)/lJRYHKgD">fixed-interest security</a> is an estimate of the total rate of return anticipated to be earned by an investor who buys it at a given <a href="/facts/Market_price/yWQ8edfN">market price</a>, holds it to <a href="/facts/Maturity_(finance)/zbEuul9J">maturity</a>, and receives all interest payments and the capital redemption on schedule. </p><p>It is the theoretical <a href="/facts/Internal_rate_of_return/DLTUfSMI">internal rate of return</a>, or the overall interest rate, of a bond — the discount rate at which the present value of all future cash flows from the bond is equal to the current price of the bond. The YTM is often given in terms of annual percentage rate (APR), but more often market convention is followed. In a number of major markets, the convention is to quote annualized yields with semi-annual compounding. </p>